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Job cuts loom as Exxaro mulls closure

Aug 08 2013 18:42 Reuters

a worker prepares for coal exports (File:AP)

Company Data

EXXARO RESOURCES LIMITED [JSE:EXX]

Last traded 139.00
Change 2.93
% Change 0.02
Cumulative volume 458047
Market cap 49.78bn

Last Updated: 22/07/2014 at 04:26. Prices are delayed by 15 minutes. Source: McGregor BFA

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Johannesburg - South African coal miner Exxaro Resources [JSE:EXX] said on Thursday it is considering shutting down its money-losing New Clydesdale Colliery, putting more than 400 jobs on the line.

Exxaro, which also said it expects first-half profit to fall as much as 45%, has struggled to find a buyer for New Clydesdale since putting the colliery up for sale in November last year.

South Africa's biggest listed coal miner said it took a pre-tax impairment loss of R292m ($29.5m) on the value of the mine, which is located in eastern Mpumalanga province.

The company - the major supplier of coal for national power utility Eskom - said buyers pulled out after it became clear that the business was "under significant and unanticipated stress."

"Revised 2013 forecasts for the operation indicated a substantial decrease in operating profit," it said in a statement.  

A closure of the mine could put the company on track for a battle with unions, as it would leave 402 workers without jobs.

Labour tensions are already high in South Africa's mining industry after a turf war started in the platinum industry between the dominant National Union of Mineworkers (NUM) and its rival Amcu.

More than 50 people died last year as the often violent strikes spread beyond the platinum sector, highlighting growing discontent with NUM, which is affiliated with the ruling ANC government.

The mine produced 717 kilotonnes of steam coal last year, primarily for the export market, Exxaro said.

Shares in the company fell 2.35% to R149.05, lagging behind a 0.5% gain the JSE Top 40 - (Tradeable) [JSE:J200] index.


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amcu  |  num  |  exxaro resources  |  job cuts  |  mining industry
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